Victims of the Commonwealth Bank’s financial planning scandal have slammed as ‘‘obscene’’ and ‘‘devastating’’ the multimillion-dollar pay packets pocketed by executives in charge of the troubled division.

Grahame Petersen and Annabel Spring received million-dollar pay rises and big cash bonuses despite a Senate inquiry that called for a royal commission after allegations of fraud, forgery and a management cover-up in the unit.

Mr Petersen, who ran the division between 2006 and 2011 when it employed rogue planners such as Don Nguyen, got more than $5.6 million - a pay rise of more than $1.1 million.

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The executive who replaced Mr Petersen as head of financial advice, Ms Spring, also received a hefty pay rise, of $900,000, bringing her total package to almost $3 million.

Merilyn Swan, whose parents were victims of Mr Nguyen, said that ‘‘in light of what has been exposed in the past 12 months it is obscene that bonuses of this size have been paid’’.

‘‘It is appalling when you think they wouldn’t hire a handwriting expert for $6000 that would have exposed forgery. It certainly puts it into perspective what their priorities are.’’

She said there was a disconnect between the salaries and people investing their life savings. ‘‘Some people lost $200,000 and it caused ruin but this sort of money to them is coffee money.’’

Jan Braund, who also fell victim to Mr Nguyen, said: ‘‘When they announced a record profit of $8.68 billion last week I thought that was obscene, but the bonuses they are paying themselves given what has gone on is even more devastating.’’

CBA banking executive Grahame Petersen. Photo: Louise Kennerley

‘‘These are the people who are supposed to look after the little people who collectively made that bank wealthy, they are the ones reaping the rewards and it has taken this amount of time for them to even think of the little people.’’

After running the advice arm, Mr Petersen became head of business and private banking. He retired this month in the wake of the financial planning debacle with a final pay packet that also included almost $1.3 million in cash bonuses.

In December, online stockbroker CommSec, for which his CBA bio shows he was responsible, was slammed by the corporate regulator after failing to keep money belonging to clients separate from the bank’s own cash.

Under Ms Spring’s tenure at the helm of the financial advice business, a flawed compensation scheme for victims led to tension with the Australian Securities and Investments Commission.

As a result, ASIC slapped new licence conditions on two CBA advice businesses, Commonwealth Financial Planning and Financial Wisdom, that included putting compensation for customers on the agenda when the bank’s board met earlier this week.

Citing ‘‘intense public scrutiny’’ of the financial planning scandal, CBA director Jane Hemstritch said the remuneration committee she heads lopped $515,000 from the bonus chief executive Ian Narev would otherwise have received.

Ms Hemstritch said CBA acknowledged ‘‘that the quality of advice provided by some of our licensed advisers in past years has caused financial loss and distress for some of our customers’’.

Despite the move, Mr Narev received a cash bonus of $3 million, up more than $400,000 from the previous year. His total pay packet soared from about $6.8 million to about $8.1 million.

The pay packets of executives were also swelled by millions of dollars worth of CBA shares, the value of which has ballooned along with the bank’s profitability.

Greens Senator and former investment banker Peter Whish-Wilson said CBA shareholders should be ‘‘jumping up and down’’ over Mr Petersen’s pay packet.

‘‘I’m flabbergasted that they’ve given him a pay rise when we don’t know what shareholders will have to pay out yet for compensation for poor financial advice over the period when he was in charge,’’ Senator Whish-Wilson said.

He said the CBA and its executives ‘‘haven’t atoned for their sins yet’’.

‘‘There’s many customers who haven’t recovered funds, lost to dodgy financial advice and bad behaviour, and yet the bosses have given themselves a pay rise.

‘‘This sales-based culture that drives shareholder returns is responsible for these large pay packets and is also responsible for the behaviour that has caused customers to lose money.’’

A CBA spokeswoman declined to comment.

100 comments

More snouts in the trough ............

Greens Senator Peter Whish-Wilson's statement that "CBA shareholders should be jumping up and down’’ is going to do what ........ NOTHING

Commenter

Porky

Location

Date and time

August 19, 2014, 6:36AM

Just shows how utterly out of touch Greens are....Share holders have to pay the ridiculous market price for "talent" (not so hard to reap billions from naive property crazy Australians).....Apply 150% tax on earnings above $750k.

Commenter

JohnBB

Location

Date and time

August 19, 2014, 7:07AM

....Meanwhile Abbott want the unemployed under 30's to live off thin air with no money and attend 40 job interviews a month not to mention Pyne's spiteful attack on the education system taxing our country's future - education is virtually free in Germany - Australia can no longer cliam it is a fair and equitable society.

Commenter

George

Location

East Melbourne

Date and time

August 19, 2014, 7:20AM

There is NOTHING anyone does in this country that justifies a pay packet of more than $500k, regardless of what they do. This is just vulgar. Tax these ppl to the hilt and then we can have free medical and possible even a PPL.

Commenter

OMG

Location

Sydney

Date and time

August 19, 2014, 7:39AM

Not sure how true this but I was talking to someone the other day, who seems to have their ear to the ground and they said that a lot of people are taking the law into their own hands when it comes to seeking compensation for being ripped off. Apparently it's more popular in some industries than others, however there seems to be an increase in home invasions and assaults of seemingly innocent law abiding citizens in the suburbs.

Commenter

Rod

Location

the Coast

Date and time

August 19, 2014, 7:42AM

Complain about a dividend of $2.18 per share, fully franked? Lemme tell ya, no shareholder is gonna be complainin' 'bout nothin'.

Commenter

Pete

Date and time

August 19, 2014, 7:51AM

And your statement has acheived..............?

Commenter

Truthy

Location

Date and time

August 19, 2014, 8:14AM

Some shareholders are jumping up and down, with pleasure at the high level of fully franked dividends. Don't forget that a large number of Super Funds have CBA shares and are quite happy with the returns. If Senator Walsh is so unhappy perhaps he can ask his Super Fund to opt him out of CBA shares. No doubt he will squeal then and complain of low returns!

Commenter

itsingers

Location

Melbourne

Date and time

August 19, 2014, 8:49AM

@OMG - the salary figures quoted in the article are gross. I am not aware that any of the individuals named in the article has an arrangement with the ATO by which they pay no tax on any part of their incomes.

Just because you don't understand how someone can earn more than $500K in a year doesn't make it wrong. As far as I'm concerned, for a dividend of $2.18 per share they're worth every cent.

Commenter

Pete

Location

2000

Date and time

August 19, 2014, 8:51AM

@ Pete,I am fully aware of how ppl negotiate wages, incentives, bonuses. The issue is not how it is calculated, but that the outcome is a salary package that is vulgar.